Location-Based Advertising: The Importance of Location to Advertising

Advertisers and service providers must have a thorough thought process behind the use of location marketing so as to maximise its potential. First in a three-part series.

Much has changed in location-based advertising (LBA) over the five years. As a member of a small team responsible to launch one of Singapore's first LBA services for advertisers, we designed the service to place advertisements near an actionable location.

Many LBA service providers (e.g. mobile operators, app developers, mobile ad networks, etc) are likely to point to reach (number of users who received the ad message) as a means to justify the tool. However, I will argue that it is more important to develop the thought process that links location to customer needs. This will facilitate future innovative services on location services on mobile devices that are increasingly technically capable to take on sophisticated customer-centric tasks for users.

LBA allows wireless users to receive content relative to their geographic position. It is based on the fact that their needs may vary depending on where they are and when they are using their devices. Wireless marketing consists of the delivery of advertisements, coupons, and other forms of promotional and transaction-driven content to wireless devices. Invariably, this will require users to have network-enabled devices that are capable of receiving incoming messages from the sender (i.e. advertiser).

Indeed, the value proposition of a user's location (sans mobile for now) is that this individual is proven to be physically present within an appropriate radius of a place of interest (for the brand owner). Using the mobile device, the brand owner can reach these identified users to make spontaneous decisions (it doesn't have to be a purchase decision) near the place of interest. Mobile is a great response tool, and users are, at any point in time in any environment because the channel is mobile and freely accessible anywhere where there are wireless frequencies, take action on an instruction sent to their mobile handsets by the advertisers.

Accordingly, the target market, value proposition, and measure of success for LBA can be defined as follows:

Target Market

Consumer-focused advertisers with products and services that meet the needs to large number of customers.

Advertisers are constantly searching for new mediums to offer personalised and focused communication channels with their customers. The contextual nature of LBA allows the users' location to be linked to a possible action that could lead to a conversion (i.e. sales revenue). As a result, there is a clearly defined ROI behind this measurable marketing strategy to justify its investment cost.

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ABOUT THE AUTHOR

With more than 16 years of experience in mobile, digital media/advertising, and e-commerce, Darren has successfully developed and launched pioneering mobile Internet initiatives such as subscription-based mobile news services, location-based advertising, behavioral targeting using consumer analytics in Singapore Press Holdings, SingTel, Cisco Systems, and DBS.

At InterContinental Hotels Group (IHG), Darren will serve as the regional subject matter expert on mobile and drive overall utilization of mobile to increase revenue and engagement in Asia, Middle East and Africa (AMEA). His mandate includes developing, implementing, and managing mobile marketing strategies to generate greater brand awareness and revenue through owned, paid, and earned media.

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